BT DD "processing" charge flawed in principle

[Guest tlusnoc]

Richardm, where does it say "usually"?

 

This is the wording taken from the bacs website;

 

"The Direct Debit Guarantee

• If the amounts to be paid or the payment dates change, the organisation collecting the payment will notify you normally 10 working days in advance of your account being debited or as otherwise agreed

  
  

• If an error is made by the organisation or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid
  
• You can cancel a Direct Debit at any time by contacting your bank or building society. We also recommend you notify the organisation concerned. "

Quite straightforward and simple isn't it!!!

[indebtstudent]

The guarantee is faulty:-

 

"You can cancel a Direct Debit at any time by contacting your bank or building society. We also recommend you notify the organisation concerned"

 

You CAN cancel a Direct Debit at any time but if it is too close to the time it is due this will do you no good whatsoever as the funds are reserved (I believe) the day before. With weekends and bank holidays the system is especially complicated. In fact if somebody asks me they normally take it on x date but it is a weekend and a bank holiday when will they take it? I really don't know what to tell them.

[indebtstudent]

tlusnoc perhaps we believe it is not by design but merely that there are significant flaws in the system, sufficeint to damage an individuals confidence in it.

[Guest tlusnoc]

indebt~ why is it faulty? Also the funds are not reserved the day before.

As for the weekend/bank holiday scenario, that all depends on the individual bank policy, however if you know a direct debit is due on x date, it is your responsibilty to ensure sufficient funds are available in the account.

[demon_x_slash]

If any of you really believe that big businesses deliberately delay sending out notifications etc. then you are living on a different planet.

 

Oh, I don't believe that they're all doing it deliberately. I believe that big businesses are, ultimately and unfortunately, run by human beings. And human beings are really, really stupid. It's our natural state, we can't help it; so where there are human beings, there are errors. Errors are okay financially when you're earning over the upper 40% threshold - but when you're earning so little that you have no choice but to live from one payslip to the next, an error can be an absolute disaster.

 

Financial errors are also like dominos: when one payment fails, the rest can follow suit very quickly. You talk about taking responsibility. I take responsibility for my money; I have incurred only two banking penalties in my entire life because I am always very careful with money, and have always been lucky enough to earn just enough; one of those penalties was because I simply ran out of money one month after paying all the bills, and the other was because a Direct Debit for my TV license came out three days early. Both times, I was fined (£20+£35), for bouncing the debit plus going overdrawn by a few pence. Both times, I was incredibly fortunate to have family able to lend me £50 or so, to help me out while I was in trouble. How many people have that sort of support system? When your family is also on the breadline, and your friends, and your neighbours - who are you going to borrow the money from, then? The £50-£100 that is absolute peanuts to the people that dream up these random charges could save a person on a low income from debt collectors, CCJs and even bankruptcy.

 

I really don't agree with your attitude, tlusnoc, even though I acknowledge that you're entitled to it; once you've read as many heartwrenching stories of people bullied and harassed into utter destitution, sometimes just because of 'one little error', perhaps you'll feel differently. But then again, perhaps not.

[RichardM]

Richardm, where does it say "usually"?

 

This is the wording taken from the bacs website;

 

 

My memory failed me. I used the word usually, but it is in fact "normally". Either way the meaning is the same as it offers an easy out for comapnies who don't feel like following the rules. You get told,

 

"Oh I'm sorry Mr Jones, but we "NORMALLY" send these out with sufficient notice, but this was a one off. The trouble is, it becomes a million "one off's."

 

I for one, will be watching closely when my next BT bill is printed and actually delivered, and if they haven't provided 10 working days between the DATE OF DELIVERY of the bill and the date due, I shall use that as full justification for refusal to sign up for direct debit AND refusal to pay the £1.50 per month charge. It will be adequate proof, considering that I have already raised a complaint in february about late delivery of bills, that they are failing to provide the required level of service in respect of the direct debit guarantee. I shall continue to pay by internet bank transfer, the cashless and intervention free alternative which BT will never be able to justify charging for as it does not cost them a penny.

[Shoestring]

tlusnoc and demon-x-slash,

 

You'd be absolutely amazed what big business will do to improve performance and increase the year-end bonuses. Sending out correspondence late is childs play in comparison to some things that go on.

 

If you were to study, say, the recent case of ENRON, the scales would begin to fall from your eyes. However, you might argue that it was a US case and not a UK one, but there was a very important UK angle to it that made it possible (the Nat West three, comes to mind).

 

For a true UK example of what I mean, read Gerald James book "In The Public Interest" Warner Books, 1996). I know Gerald and I know first hand some of the things he wrote about ;-).

 

I reccomend you particularly immerse yourself in Gerald's commens regarding a certain gentlemen of his acquainance (and mine) who was a senior executive for a leading British bank and who's former profession was as head of an off-the-books assassination squad that operated on behalf of the Foreign and Commonwealth Office (page 154-156 of above referenced book). Smashing eh?

 

But there are also numerous other examples of business excesses in between.

 

It's just a case of becoming educated about the real attitudes and aims of big business. Once you've seen a few cases in action - and how the authorities deal with them (or not) - you'll no longer have the (quite understandable) reservations you do.

 

Shoestring

[patdavies]

Errors are okay financially when you're earning over the upper 40% threshold - but when you're earning so little that you have no choice but to live from one payslip to the next, an error can be an absolute disaster.

 

 

I see the green-eyed god of envy here.

 

Just because somebody is earning above the 40% tax threshold, does not mean that they are not living month to month with little margin for error. I know. I've been there!

[RichardM]

I see the green-eyed god of envy here.

 

Just because somebody is earning above the 40% tax threshold, does not mean that they are not living month to month with little margin for error. I know. I've been there!

 

I know what your saying. I know at least one person who is in the 40% bracket but is struggling because of mortgage commitments. I think what demon_x_slash was trying to say was that someone in the higher earnings bracket is more likely to have at least a small reserve to avoid critical moments and would certainly have more clout if it came to a fight.

 

I can only agree with him about the domino effect having spent the first 25 years of my adult life suffering from it. I've even got to the stage of not being able to go to work, because I couldn't afford the season ticket to get there. I was earning around £800 per month (back in 1998) and at least £500 of that was going to service debts and loans which had built up since left home at 15 to take a job as an apprentice. That's where the problems started, living away from home and taking home £25 a week, not because of any lack of responsibility.

 

I eventually took redundancy from my job after 19 years, because the redundancy package was the only way that I could see to be able to clear most of my debts, which I was fortunate enough to be able to do. That's why I get so angry when people like Tlusnoc come on this site and pontificate about how it's all your own fault and you should take responsiblity for it. For many people it's a matter of circumstances that leads them to the position that they are in, not fault.

 

Fortunately, I now have total control over my finances and have had for the last two years. That was in no part thanks to being able to reclaim from the banks nearly £2000 that they had taken from me, in the case of Lloyds, from 1982 (I had kept all of my statements so was able to calim without an SAR). I have no debts or loans other than my mortgage, a perfect credit record and have no intention of allowing any company to screw that up by giving them free reign with my money as I have been forced to do in the past.

 

That for me, is what this site is all about. Taking back control of your own finances, and for many it follows, your own life from the financial institutions who have little or no business scruples and absolutely no interest in your wellbeing, just how much money they can screw you for.

[RichardM]

Incidently, one other point about DD's. I have got a fixed amount dd for my broadband which is supposed to come out on the 16th of the month. Having looked back over the last 18 months, it has come out of my account anywhere between the 13th and the 16th, for no apparent reason. It has been Thursday 16th one month and Tuesday 14th the next for example

 

My pay day is every 4th Friday, so in June I get paid on the 15th and in July on the 13th. Potentially, if the June DD is taken on the 15th or 16th, and the July on the 13th, I'm paying two months worth of direct debits out of the same months pay. Not a problem for me, but for some people, potentially critical. How do you legislate and plan for that?

[RichardM]

...

[demon_x_slash]

I see the green-eyed god of envy here.

 

Just because somebody is earning above the 40% tax threshold, does not mean that they are not living month to month with little margin for error. I know. I've been there!

 

No, no - I meant that people earning that much usually have enough money in their accounts to act as a buffer, so the 'domino effect' for one error doesn't occur, and isn't as potentially devastating as it may be for someone earning £14,000pa. I didn't mean it was okay for the error to happen in the first place

[indebtstudent]

Didn't I just explain how it is faulty? I can assure you I have had MANY a customer come back to me and say I cancelled the direct debit on X date and the payment came out after that. So many in fact that I ask people when the DD is due when I cancel it. I know if I cancel it today and it is due tomorrow the payment will be made. This is also my basis for arguing that the funds are in fact reserved the day before. If this is not the case then why isn't the cancellation instant?

 

Furthermore I recall at least one message on here with a company saying ah but you cancelled the DD with your bank but not with us (I cannot see the logic in this statement). I can vouch for the fact that this happens and is a clear violation of the guarantee.

 

Please don't second guess things that I see everyday I'm not making these points for fun I just want to people to be aware of what actually goes on. Perhaps then we can look at some solutions?

[indebtstudent]

"I see the green-eyed god of envy here.

 

Just because somebody is earning above the 40% tax threshold, does not mean that they are not living month to month with little margin for error. I know. I've been there!"

 

I understand what you're saying but surely the point was choice. You could argue that you 'had to' have such a mortgage and you might have a pint if you live in London BUT it is undeniable that you hvae/had more options than somebody living on the breadline. You could've moved somewhere else, perhaps have the capacity to earn more and more as each year goes by.

 

The size of your mortgage likely meant that you had a better quality of life than people struggling to make ends meet. I'm sorry but I struggle to have sympathy for people complaining about money when it is to do with luxuries.

[snu]

Personally, I've only ever had to reclaim a direct debit once (close to £100 taken out when I wasn't supposed to be billed anything that month), and all it took was a 5 minute phone call to Nationwide and it was back in my account the next day (much to the confusion of the service provider).

 

The UK payment industry is undergoing a reshuffle later, with a new real-time bank transfer system on the cards (see Immediate Payments Ltd). Hopefully that will help to reduce confusion somewhat - although it will be at the expense of some flexiblity with regard to gaming the float.

[Shoestring]

The question is whether all these incorrect DD pament are a result of a confusion" or, more likely in my view, a jolly game of grabbing the swag and running with it hoping not to be noticed.

 

Semi real time payments (that is to say same day payments) have been a fact of life for decades for institutions in the City. "Country" payments was another matter. Lots of City based financial institutions used to have different cheque books and would write a cheque on one or another depending on who the recipient was. A City cheque cleared same day. A "country" cheque took three days or more. That was at least twenty years ago. In more recent times banks have taken longer - not less time - to clear funds, with five days being not that unusual. The cash pool that develops from billions upon billions of lucre moving daily amounts to a tidy sum of interest when spread across the year don't ya know.

 

Shoestring

[Odd Fellow]

Oh for goodness sake Shoestring, do you really think big businesses are going to do such a thing? They have far more important things to be doing than that, such as chasing up all the non/late payers that they have as customers. I despair at some of the comments that are made on this site, have any of you actually run your own business?

 

 

Errr? Yes, of course big businesses would be "bothered" to do this. Many of these big businesses didn't get big because they are nice and cuddly. It's surely worth bothering if you can lever more money out of people on a false premise that's going to largely go unchallenged.

 

Let me think where this may have happened with other big businesses.... Ah, yes, I remember now; banks and unlawful charging.

 

I run my own businesses - 3 in fact. I don't charge my clients for processing their payments - I respect them too much.

[Odd Fellow]

edit...

 

I really don't agree with your attitude, tlusnoc, even though I acknowledge that you're entitled to it; once you've read as many heartwrenching stories of people bullied and harassed into utter destitution, sometimes just because of 'one little error', perhaps you'll feel differently. But then again, perhaps not.

 

 

Quite.

[Odd Fellow]

No, no - I meant that people earning that much usually have enough money in their accounts to act as a buffer, so the 'domino effect' for one error doesn't occur, and isn't as potentially devastating as it may be for someone earning £14,000pa. I didn't mean it was okay for the error to happen in the first place

 

Sorry, I don't agree at all. You can't just make sweeping generalisations like that. Just because someone earns £1m a month don't mean they don't have commitments of £1.2m a month.

[Odd Fellow]

The question is whether all these incorrect DD pament are a result of a confusion" or, more likely in my view, a jolly game of grabbing the swag and running with it hoping not to be noticed.

 

Semi real time payments (that is to say same day payments) have been a fact of life for decades for institutions in the City. "Country" payments was another matter. Lots of City based financial institutions used to have different cheque books and would write a cheque on one or another depending on who the recipient was. A City cheque cleared same day. A "country" cheque took three days or more. That was at least twenty years ago. In more recent times banks have taken longer - not less time - to clear funds, with five days being not that unusual. The cash pool that develops from billions upon billions of lucre moving daily amounts to a tidy sum of interest when spread across the year don't ya know.

 

Shoestring

 

Indeed. The UK banking system is slow by design - it may be old and antiquated but it's well within the powers of the banks to change this. The fact is, they choose not to.

[Odd Fellow]

There's a huge amount of digression here so, trying to get back to the matter in hand.... BT's outrageous attempts to screw more money out of us without actually raising its telephony charges.

 

There's a lot of talk about debts and legal tender. Here's a spanner.

 

I beleive I am right in saying that the BT phone bill is made up of two elements; 1) the provision of the line and 2) the calls made.

 

I beleive I am also right in saying that the provision of the line is billed IN ADVANCE and the calls are billed in ARREARS. If this is the case, as much as it pains me to say it, the argument about the settlement of a debt is somewhat changed as only part of the bill is a debt.

 

Please ignore me if I'm talking rot.

[Shoestring]

Correct. The Line Rental is charged in advance. Call costs are charged in arrears.

 

Confusing ain't it, sort of like asking for a deposit for a meal in a restaurant upon arrival but settling the full remainaing bill at the end of the meal. Mind you, a meal in a restaurant is regarded as a debt since a service has been provided. Paying a fare when getting on a bus on the other hand is not regarded as a debt. But in its simplest definition "debt is what someone owes to someone else" (see: Debt - Simple English Wikipedia, the free encyclopedia) and thus the rendering of a bill for a payment in advance can be construed as a de facto debt. The argument here is that if you didn't pay the Line Rental then BT could, if they so chose, sue you for it as a debt...

 

But things may be getting a little bit too complex and exotic

 

Shoestring

[indebtstudent]

"If any of you really believe that big businesses deliberately delay sending out notifications etc. then you are living on a different planet."

 

And if they do this by not allocating sufficient resources to the departments that deal with billing and admin etc the effect is the same although the action is different. If you're the customer who comes unstuck do you care?

 

The only way to use direct debits safely is to make sure that the whole amount of whatever you owe each month is in the account, but of course there could still be errors and the point is that the onus is on the customer to sort it out.

 

If I go on holiday and my account is cleaned out due to someone else making an error that doesn't really helpe me when I'm at the airport (or even aborad!) unable to withdraw any cash.

[mfpa]

Thus the rendering of a bill for a payment in advance can be construed as a de facto debt. The argument here is that if you didn't pay the Line Rental then BT could, if they so chose, sue you for it as a debt.

 

By the time the case came to court, the period the line rental covered would have elapsed, so it would indeed be a debt - unless they had disconnected you. Then (in my opinion) they would be seeking unjust enrichment.

 

And I just noticed this thread is nearly 2 years old (-;